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PtrBWCAMONS OP 

The American Academy oe Powticai< and Sociai, Sciencb 

No. 333 



Professor Patten's Theory 
of Prosperity 



Henry R. Seager, Ph. D. 

Washington, D. C. 



Reprinted from the ANNALS of the American Academy of 
Political and Social Science for March, 1902 



PHILADELPHIA 
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PROFESSOR PATTEN'S THEORY OF PROSPERITY. 

Since the publication of his Dynamic Economics, Professor 
Patten has seemed open to the charge of turning his back on 
his chosen specialty to embroil himself with sociologists, 
psychologists, historians and other quarrelsome persons. He 
began his poaching in other preserves with the modest effort 
to wrest from sociologists the study of the origin, even, of 
society. His claim that in its origin as well as in its later 
development society is mainly economic called forth vigorous 
protest, notably from Professor Giddings, to whom the book 
under review is dedicated. But this was as nothing com- 
pared with the outcry caused by Professor Patten's next 
enterprise. In his Theory of Social Forces (1896) he pro- 
posed an explanation of the nature and laws of growth of 
the mental mechanism which caused psychologists at first to 
gasp and then to clamor against the daring invader. The 
discussion which ensued was eloquent not so much of what 
is, but of what is not, known of the working of the human 
mind. These ventures on Doctor Patten's part were, how- 
ever, mere preliminaries. His greatest undertaking was the 
attempt to give a concrete illustration of the economic inter- 
pretation of history in his Development of English Thought 
(1899). This work, which is still fresh in the public mind, 
brought down upon him the condemnation of a body of stu- 
dents larger and more influential than the sociologists or the 
psychologists, the historians. He was accused of making 
up the history he professed to interpret. Some critics said 
that history, even such reputable history as that of England 
since the Conquest, is still too incomplete to admit of inter- 
pretation. Other, or even the same critics, declared that 
history, when accurately narrated, interprets itself and that 
it was preposterous for a person who did not claim to be an 
historian to attempt to instruct specialists in that subject as 

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76 Annals of the American Academy 

to the real significance of the facts which they were so 
laboriously collecting. Still others objected that human 
motives in the past, as in the present, were complex and that 
no simple scheme of interpretation, whether economic, moral 
or religious, could serve any but a partisan end. They urged 
the danger that a writer who started out with a preconceived 
theory of historic causation would refuse to accept as facts 
any events not in harmony with it, and cited examples in 
point from Professor Patten's pages. Finally the old cry 
was raised that a nation's history is the biographies of its 
great men, and that greatness or genius is too miraculous in 
its origin and deveflopment to be " interpreted " according to 
any scheme. 

Even sincere admirers of Professor Patten, who have fol- 
lowed these controversies, will be apt to welcome with relief 
the Theory of Prosperity^ in which he so unequivocally] 
returns to the domain of economics. But it would do scant- 
justice to his intelligence to assume that the work of the last 
ten years represents the by-products of his restless and 
original mind, and that the last book can be understood if 
treated as the next in succession to his Dyjianiic Economics. 
The fact is far otherwise. Professor Patten is nothing if he 
is not persistent in following up a line of thought once 
entered upon. If he has seemed to turn aside from econom- 
ics it is only because he felt that he had pushed his analysis 
as far as it could be pushed, with any profit, on the basis of 
the premises with which he started. His successive tilts 
with sociologists, psychologists and historians were under- 
taken in the conscious endeavor to enlarge the scope of 
economic speculation. Only when it is clearly perceived 
what he was driving at in these seemingly uneconomic excur- 
sions can the significance of his latest work be understood. 

It is in no spirit of apology for Professor Patten's devia- 
tions from the straight and narrow path of academic speciali- 
zation that this attempt is made to indicate the relation 
between his recent writings. As a distinguished inventor 

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PROF:essoR Pattkn's Theory of Prosperity 77 

has remarked, the progress of science and discovery is largely 
the result of the untiring pursuit of unlikely hypotheses. It 
follows that the world's debt to the few thinkers in each gen- 
eration who have the temerity to look at things in a little 
different way from those around them is incalculable. An 
original thinker, such as Professor Patten is universally con- 
ceded to be, should be gladly welcomed in any field and 
requires no excuse for venturing where he pleases so long as 
his efforts are constructively directed. That his investiga- 
tions rarely attain to finality is as little to be cherished against 
him as is the inventor's proverbial failure to turn his dis- 
coveries to commercial use. 

In order to understand the unfolding of Professor Patten's 
ideas, it is necessary to go back of the Dyna'>nic Economics 
and see its relation to earlier work. His first book, The 
Premises of Political Economy, was an attempt to recast the 
economics of Mill so that it would apply to American con- 
ditions. What those conditions were was impressed on the 
author's mind by some years of study in Germany, preceded 
and followed by life in rural Illinois. This experience 
taught him the importance of habits of consumption in shap- 
ing national life and character and at the same time led him 
to distrust the assumption that individuals know what is 
best for themselves and if left alone will secure it. Pursu- , 
ing the same line of thought still further, he brought out 
later his monograph on The Consum-ption of Wealth, which 
concludes the first period in his development. 

The Economic Basis of Protection is the first step in a some- 
what different direction. He believed that free trade was 
good for England, but not for America, and that led him to 
inquire into the differences in environment and national 
traits that distinguished the two countries. From this con- 
crete study he arrived at the conclusion that the weakness 
in English economics is that it makes no allowance for quali- 
tative changes in men and goods. He attempted to correct 
this error in his Dynamic Economics, in which he represents 

[241] 



78 Annai^ of thk American Academy 

progress and change as normal phenomena and attempts to' 
reduce them to law. 

The third period in his thought began also with a concrete 
study, his Interpretatio7i of Ricardo. He became convinced 
that local conditions not onl}- determine what economic poli- 
cies are desirable, but that they also shape men's ideas and 
even their modes of reasoning. To put the theory to the 
test he undertook to show that Ricardo was a believer in free 
trade because he argued from the point of view of a city cap- 
italist, while Malthus was a protectionist because he argued 
like a farmer. The latter proposition was easier of proof 
than the former, but in both instances the attempt was 
crowned with a considerable degree of success. 

The Theory of Social Forces and The Development of 
Ejiglish Thought are products of this third period. If, as 
Professor Patten came to believe, even ideas, beliefs and 
modes of reasoning are changed by local conditions, the old 
associational psychology and the old utilitarian ethics are no 
longer adequate bases for economics. Inspired by this con- 
viction he set about formulating new psychological princi- 
ples in order to show how previously unobserved properties 
of mind act as social forces in shaping human progress. His 
own estimate of the value of this first attempt is frankly ex- 
pressed in the introduction to The Theory of Social Forces. 
He there says : "I feel that I must make an apology for 
injecting so much psychologic discussion into this essay. To 
many readers this will seem foreign to the subject and may 
arouse prejudices which will interfere with a correct appre- 
ciation of the other facts. It should, however, be kept in 
mind that every social philosophy has, as its basis, some 
theory of psychology. The doctrines of Locke and Hume 
have proved a most admirable basis for the old social philos- 
ophy. They ignore, however, the elements upon which the 
social forces rest. A new social philosophy cannot pass be- 
yond the inductive stage until these factors are recognized 
and a picture of mental activity constructed which empha- 

[242] 



Professor Pattern's Theory of Prosperity 79 

sizes the elements neglected by the old philosophy. Even 
if the type of psychology which I present is faulty, it can at 
least serve as a provisional philosophy until psychologic 
research is far enough advanced to furnish a better basis." 

The Development of English Thought is even more di- 
rectly the outgrowth of his essay on Ricardo. In it he 
attempts to do for the whole English nation what the essay 
tried to do with reference to two individuals. Speaking of 
the undertaking, he says: "The theory presented is 
scarcely open to question, though some of its corollaries 
may not be evident. Survival is determined and progress 
created by a struggle for the requisites of which the supply 
is insufScient. These requisites are the goods for which 
men strive or the means by which they meet evils. A group 
of such definite objects, upon which the life and happiness 
of each race depend, always exists. The environment 
formed by this group of economic objects surrounding and 
supporting a given race, changes with the several objects on 
which the interests of the race are centered. With the new 
objects come new activities and new requisites for survival. 
To meet these new conditions, the motives, instincts and 
habits of the race are modified ; new modes of thought are 
formed ; and thus, by the modification of institutions, ideals 
and customs, all of the characteristics of the civilization are 
reconstructed. These changes take place in a regular order j 
the series repeats itself in each environment. In its ampli- 
fication and illustration lies the economic interpretation of 
history, ' ' 

Professor Patten had two reasons for selecting England 
for his larger experiment in "economic interpretation." 
In the first place, the comparative isolation in which English 
civilization has developed makes the problem of interpreta- 
tion easier than it would be for either of the great conti- 
nental nations. Secondly, English experience had supplied 
the basis for the three economic systems in which he was 
most interested ; that of Ricardo, that of Marx, and, in a 

[243] 



8o Annals of the American Academy 

more roundabout way, that of George. He hoped, through 
his profounder study, to show that the premises on which 
each of these writers based his conclusions in regard to the 
future of society were only of temporary validity. 

It would take far too much space to attempt an estimate 
of The Developniejit of English Thozcght. It is Professor 
Patten's own opinion that his method of interpretation 
answered fairly well until he came to Adam Smith. Here 
he admits it broke down, and it was his partial failure to 
portray Adam Smith satisfactorily that led him to formulate 
the leading distinction that appears in his Theory of Pros- 
perity, that between " existing conditions " and "heredity" 
as determinants of income. 

From this review of Professor Patten's writings it must 
be apparent that far from " turning his back " on economics, 
in recent years, he has been working away with direct refer- 
ence to the needs of that science. His incursions into the 
field of sociology were not freebooting expeditions, but rea- 
soned demands for a resurvey of a doubtful portion of the 
domain to which sociologists laid claim. His attempts to 
reconstruct some of the principles of psychology were 
intended less as contributions to that subject than as appeals 
to psychologists to push their investigations into channels 
that might be helpful to economics. His Development of 
English Thought was not history, but an attempt to interpret 
history by the light of social philosophy. All are products 
of a vigorous and original mind, dissatisfied, as what mind 
is not, with the present stage of development of the social 
sciences and seeking to break the bonds of tradition by 
pointing out new fields for economic research. Whatever 
the ultimate verdict in regard to these works as contribu- 
tions to knowledge may be, there can be no question as to 
their value as contributions to thought. 

After such fruitful years it was inevitable that Professor 
Patten should return to the study of economic problems in 
an iconoclastic mood. This is perhaps the most striking 

[244] 



Professor Pattbn's Theory of Prosperity 8i 

characteristic of The Theory of Prosperity. Always heedless 
of disagreements between himself and other so-called 
authoritative writers, the author appears in this last book as 
almost reckless in his masterful disregard of conflicting 
theories, his own of earlier date not excluded. 

As already suggested, The Theory of Prosperity is divided 
into two parts: (i) Income as Determined by Existing 
Conditions (A Study of Efforts and Satisfactions) ; and (2) 
Income as Determined by Heredity (A Study of Discontent 
and its Remedy). Each part is divided in turn into three 
chapters, as follows: Part I. (i) Work and Pay, (2) Mo- 
nopoly Advantage, (3) Investments. Part II. (i) Income as 
Fixed by Struggle, (2) Income as Increased by Adjustment, 
(3) Income as Modified by Economic Rights. The basis for 
this arrangement is clearly set forth in the Introduction. 
Attention is there called to the fact that when the concepts 
wages, profits and rent were first formulated in English 
economics there was a distinct social class to which each one 
of these incomes went. At the present time, at least in the 
United States, it is thought that old class barriers have so 
far broken down that there is no distinction between land- 
lords and capitalists, and only a shadowy one between wage- 
earners and property owners. If free play could be given 
to economic forces class barriers would be entirely swept 
away. The entire income of industrial society might then 
be described as wages, as interest, or as rent, according to 
the point of view. But free play will not be given to eco- 
nomic forces for the reason that hereditary differences will 
remain. As in the past such differences have perpetuated 
exploitation in the face of economic forces tending to put a 
Stop to it, so in the future they will perpetuate conditions 
different from those which economic forces tend to establish. 
The division of the work into two parts is due to a recog- 
nition of these two sets of influences acting on contemporary 
economic phenomena. Part I considers existing conditions 
and forces as determinants of income; Part II conditions and 

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82 Annai^ op the American Academy 

forces of the past whicli*coutinue to operate in the present as 
hereditary qualities, traditions, institutions, etc. The dis- 
tinction may be thought of as a substitute for that made 
prominent by Professor Clark between economic statics and 
economic dynamics. So considered the most striking prac- 
tical difference between the two is that to Professor Patten 
monopoly is a normal result of ' ' existing conditions, ' ' while 
to Professor Clark it has no place in ' ' statics. ' ' 

As is suggested in the hitrodudion, the three chapters of 
Part I represent different points of view from which the dis- 
tribution of income may be regarded. To the individual in 
direct contact with the environment the relation is that 
between Work and Pay. The more evolved individual of 
progressive industrial society owes much, if not most, of his 
income to the enjoyment of some Mo7iopoly Adva7itage. A 
third point of view is that of hivestments. The present 
lives on the past and owes its well-being largely to past fore- 
sight. Contemporary distribution results from the inter- 
action of the forces revealed by a study of the problem from 
these three view-points, or would but for the interference of 
the hereditary influences discussed in Part II. 

In the chapter on Work and Pay the thought made most 
prominent is that production and consumption are related 
not as means to end, but as phases of a continuous process. 
Work affords goods, goods afford utility, utility is the sub- 
jective accompaniment of the generation of energy, energy 
expends itself in work. This is the normal round and under 
normal conditions — free play being given to economic forces 
and time being allowed for individuals to adapt themselves 
to existing conditions — every stage of this round is pleas- 
urable. The last point is obscured because men are forced 
to work longer hours than they would themselves choose 
during the period of transition w^hen they are becoming ad- 
justed to new tasks, and because many spend their incomes 
in dissipation, in this way reducing, instead of restoring, 
their energy, and making any sort of activit)^ painful. 

[246] 



Professor Patten's Theory oe Prosperity 83 

Elimination of the unfit serves, however, to cut oflf both the 
overworked and the dissipated, and in time to evolve a 
normal type which takes as much or more pleasure in its 
work as it does in its rest and relaxation. The ideal of the 
man who works for pay should be to do nothing that is pain- 
ful or distasteful, except in the face of an emergency, and 
to consume nothing that does not build up the organism and 
prepare it for further activity. If wants did not change or 
increased only at the same rate as productive power, the 
normal round that has been described would be readily 
attained and the whole process of distribution would be 
simple. Kach worker would get the equivalent of what he 
produced. 

The discussion of Monopoly Advantage is less satisfactory 
than that of Work and Pay. The thought runs somewhat 
as follows: Monopoly incomes are connected with price 
changes rather than with changes in value. The former are 
possible because productive power increases irregularly in 
different branches of industry and because wants expand 
unequally. The one certain check on monopoly is found 
not in the field of production, where combination is quite 
apt to take the place of competition, but in the field of con- 
sumption. It is the power consumers have of substituting 
other articles for those whose supplies are controlled bj^ the 
monopolists. This power is sometimes extremely restricted, 
sometimes so wide that producers must accept prices just 
covering their expenses of production or go out of business. 
Sooner or later substitutes will be found for each monopo- 
lized good and the monopolist will be deprived of his advan- 
tage. At any given time there is a definite limit to the size 
of the monopoly income, and it follows that what one mo- 
nopolist gains is at the expense of other monopolists. Early 
in the century the monopoly fund went largely to landown- 
ers. I^ater the railways acquired the lion's share of this 
fund. At present industrial combinations appear to have the 
upper hand. Elevating standards of living and lessening 

[247] 



84 AnnaIvS of the; American Academy 

the risks involved in business tend to reduce the monopoly 
fund, but its complete elimination can onh' come when con- 
sumers acquire complete power of substitution. 

Though acute and suggestive this treatment of monopolies 
leaves a good deal to be desired. The author uses the term 
monopoly in such a general way, speaking at times as though 
it included all differential advantages in production and at 
times as though it did not, that the reader is left in some 
uncertainty as to the precise meaning of the term. More- 
over, there is a gentle optimism running through the chap- 
ter that seems hardly justified by the facts. To be told that 
whale oil is a substitute for kerosene and prevents the Trust 
from putting up the price beyond a certain point, is about as 
consoling as would be the proposition that flying machines 
will one day serve as substitutes for railways and break the 
monopoly of transportation agencies. Perhaps the author 
looks for the latter development in the near future, since he 
afi&rms that " the monopoly power of railroads seems, there- 
fore, to have reached its maximum," without offering any 
very convincing basis for the ' ' therefore ' ' in his proposition. 

The chapter on hivestments is the longest and most impor- 
tant in the book. It is introduced with a theory of interest 
so novel as to deserve extended notice and concludes with a 
criticism of Professor Clark's Theory of Distribution that is 
profound if not entirely convincing. 

The theory of interest is briefly as follows : As explained 
by Bohm-Bawerk interest is at bottom the difference between 
the present price of future goods and the price these goods 
command when they have ripened into present goods. It is 
a phenomenon of exchange depending upon the laws govern- 
ing valuation. Professor Bohm gives three reasons for the 
under\^aluation of future goods : defects of imagination, 
defects of will, and the shortness and uncertainty of life. 
To Professor Patten these all seem to be " race differences, ' ' 
and hence he infers that as race differences disappear and 
all men become alike, interest must disappear also (p. 98). 

[248] 



Proi^kssor Pattkn's The;ory of Prosperity 85 

If the undervaluation of future goods depends on ' ' existing 
conditions," it must have some other and more permanent 
cause. 

At this point it might be objected that the shortness of 
human life and even its uncertainty are in no sense the con- 
sequence of " race differences " and that as far as they influ- 
ence the problem they may be looked to to perpetuate the 
phenomenon of interest. Also that it is not clear why as 
men become alike the prevailing type may not exhibit some 
weakness of imagination or even infirmity of will as did 
most of their ancestors. The elimination of differences has 
in no place been shown to involve the appearance of a perfect 
being and if inability to visualize the future so that it appears 
in consciousness with the same vividness as the present is a 
common characteristic of man, it also may serve to perpetu- 
ate interest. But these points are unimportant because they 
have no direct bearing on Professor Patten's own theory. 

The permanent ground for interest is found by Professor 
Patten, as was to have been anticipated, in the field of con- 
sumption. Additional commodities enable men to consume 
better complements of goods. ' ' Men thus value additional 
complements of goods more highly than the goods they 
have." " There is always a pressure on a man to consume 
more than his share or his income so as to enjoy the effect of 
the enlargement of this complementary consumption. Bach 
increase in the amount of his goods gives a still greater in- 
crease in the amount of his pleasure. Consumers want to 
use more than they have, and make higher bids per unit of 
goods to get them. The greater is the quantity of the 
goods the greater is their value per unit. A surplus value 
is thus created by advances from a smaller consumption of 
units of goods to a larger and hence a more harmonious con- 
sumption of these units. This surplus value is the source of 
interest," (Pp. 100 and 102.) 

It is a hazardous thing to criticise a new theory when it is 
first formulated. The critic is more apt than not to fail to 

[249] 



86 Annals of the American Academy 

grasp the full significance of the innovation and to magnify 
points that a few words of explanation would clear up. The 
following objections are advanced, therefore, in a tentative 
way to induce Professor Patten to elucidate still further his 
theory of interest, in case its implications have been mis- 
understood. 

At the very outset it is obvious that the proposition that 
the importance of units of commodities increases with their 
quantity, because they may be arranged into better comple- 
ments, involves a denial of the principle of diminishing 
utility which Professor Patten accepts, in common with 
other economists, in other parts of his book. If the relation 
he represents really obtains, marginal utility increases, 
normally, as the supply increases, and the more men have 
the more highly they value each unit which they have. 
That there is some evidence in support of this view is not to 
be denied. The standard of living rises readily as income 
grows and makes even a princely income seem insufficient to 
those who have become accustomed to it. In discussing the 
relations between different classes this flexibility of the stand- 
ard of living must be given great weight. On the other 
hand it must not be overlooked that at any given time each 
class has its standard of living and arranges the commodities 
which enter into its consumption into the complementary 
groups with which it has long been familiar. Additional 
income to an individual means at the outset simply more 
goods of the old kinds arranged in the old groups. It takes 
time to learn new combinations and unless the additional 
income is enjoyed continuously for a prolonged period, they 
will not be learned. But if the new income is expended for 
the old complements of goods it is hardly to be doubted that 
the law of diminishing utility will apply to them. On these 
grounds the accuracy of the author's psychology is called 
in question. 

But even if it be admitted that the more men have, the 
greater is the value they ascribe to each unit, it is not easy 

[250J 



Professor Pattern's Theory of Prosperity 87 

to see that this has any bearing on the question of interest. 
As Professor Patten recognizes, interest is a problem of 
exchange value or price, not of subjective value or marginal 
utility. The latter plays a role in the problem only as it 
can be shown to influence the exchange ratio between pres- 
ent and future goods. Professor Patten's formula declares 
that additional goods add more than their proportion of 
utility to the total enjoyed by each consumer. If true at 
all, this proposition must be as true of additional future 
goods as of additional present goods. If more goods mean 
better complements, more future goods are as much to be 
desired, unit for unit, as more present goods by the man 
who has thrown off the ' ' race differences ' ' which caused 
him to discount the future. Otherwise, the principle, instead 
of being general, as represented, would be of very temporary 
and local application. If this objection is well taken, the new 
basis that is proposed for interest has no connection with 
the phenomenon to be explained. It refers to the subjective 
side of value, and not to exchange value or price upon 
which interest depends. 

Space will not be taken to attempt even a summary of 
Professor Patten's criticisms of the theory of distribution 
proposed in Professor Clark's Distribution of Wealth. The 
most important conclusion at which he arrives is, that there 
is a third income that is as persistent, as " normal," and as 
"static" as wages and interest, that is the income com- 
monly called "rent." His explanation of the relation 
between rent or ' ' funded income ' ' and wages on the one 
hand, and interest on the other, is worthy of the most 
thoughtful attention. It will commend itself particularly 
to economists who are dissatisfied with the present tendency 
to disregard the distinction between man-made tools, ma- 
chines,* etc., and nature-given land. 

The second part of The Theory of Prosperity goes far 
towards justifying the author's plan of arrangement. Al- 
though many will take exception to particular points in 

[251] 



88 Annals of ths Amejrican Academy 

these chapters on ' ' Income as Determined by Struggle, ' * 
"by Adjustment," and "by Economic Rights," all must 
admit that they bear out the author's contention that a 
prominent place must be given in a treatise on distribution 
to problems of heredity. It is gratifying to know that Pro- 
fessor Patten is already at work on another book which will 
treat specifically of this phase of the subject. 

The line of thought running through Part II may be 
summarized as follows : There are two sorts of adjustment, 
" adhesive," or adjustment to the conditions of a restricted 
local environment, and "cohesive," or adjustment to one's 
fellows through various forms of social organization. In a 
progressive society, the former is favorable to exploitation, 
the latter to philanthropy. Most of the people in any given 
environment are accustomed to accept low returns for their 
efforts. As their productive power increases and more wealth 
results from these efforts, they will permit conquerors or 
rulers or upper classes to seize this additional wealth and 
leave to them, the toilers, only the small incomes to which 
they are habituated. Only gradually do the standards of 
the masses rise, and meantime their productive powers 
continue to increase, so that there is always in a developing 
society a considerable fund for the exploiter. But there is 
a limit to the amount an individual can consume without 
loss of energy and degeneration. Excessive consumption or 
over-nutrition is as fatal as its opposite. It follows that the 
favored individuals whose incomes grow beyond their needs 
fall into two classes, the dissipated, who are eliminated by 
the stern evolutionary process, and the philanthropic, who 
share their surpluses with their less favored brothers. In 
this fashion the exploiter, cohesively adjusted to the social 
group to which he belongs, turns philanthropist. The 
strong cease to prey vipon the weak, and become their 
helpers. 

There are four stages in man's development. Under 
primitive conditions his chief concern is the avoidance of 

[252] 



Professor Pattkn's Theory op Prosperity 89 

pain. He owes his survival in the struggle for existence to 
his strong passions, which enable him to brush aside obstacles 
from his path and to overpower his enemies. As he becomes 
completer master of the situation the pursuit of pleasure 
takes foremost place as a guide to his conduct. He now 
develops by the intensification of his desires, which push 
him on to ever new conquests over the environment. In 
this stage reason appears and serves as an important aid to 
his progress. As his desires are more and more fully satis- 
fied his consumption generates surplus energy which must 
expend itself as activity. At first aimless and spasmodic, 
this activity-for-its-own-sake gradually comes to be directed 
along useful channels. It is guided by his impulses just as 
his productive efforts are guided by his desires. The differ- 
ence is that while the latter are individual the former are 
social. Impulses are always toward the ideal, the better- 
than-self, and the more completely deliberative effort for 
^oods is displaced by impulsive activity the more highl}'- 
social conduct becomes. Both desires and impulses impel 
men in the same direction, that is toward perfect adjustment, 
but they do so in different ways. Desires set up standards 
to which individuals and classes conform as a means to real- 
izing their own best good. Impulses set up rights, not for 
the benefit of the individual who asserts them, but for that 
of the less fortunate individuals who need protection. The 
goal toward which both are impelling society is pleasurable 
activity, resulting in the production of pleasure-giving goods, 
whose consumption generates more energy to be expended 
in renewed pleasurable activity. 

The last chapter enumerates and explains the economic 
rights which in Professor Patten's opinion are coming to be 
recognized as of fundamental importance to a free society. 
These are : ( i ) Public or Market Rights, or Rights to an 
Open Market, to Publicity, to Security and to Co-operate. 
(2) Social Rights, or the Right to a Home, to Develop, to 
liVliolesome Standards, to Homogeneity of Population, and to 

[253] 



90 Annals of the American Academy 

Decision by Public Opinion. (3) Rights of Ivcisure, or the 
Right to Comfort, to Incisure, to Recreation, to Cleanliness, 
and to Scenery, (4) Exceptional Rights, or The Right to 
Relief and The Right of Women to Income. This list is pro- 
posed not as exhaustive, but simply by way of illustrating 
how economic rights react on economic relations. To the 
extent that public opinion recognizes these rights as valid in 
future years will the distribution of income be modified in 
conformity to their requirements and the general well-being 
be promoted. 

The above are only a few of the suggestive thoughts pre- 
sented in this part of the book. From the point of view of 
literary form it is much less satisfactory than Part I, while 
its conclusions admit less of criticism and discussion. It is 
a valuable piece of pioneer work in a new field and encour- 
ages the hope of important results from Professor Patten's 
next volume. 

In closing, it is no easy task to attempt a general estimate 
of The Theory of Prosperity . It is not a complete theory of 
distribution. Its constructive contributions to economics 
are so nearly offset by its destructive attacks on accepted 
views that it is doubtful whether it will take its place, at 
last, as criticism or as dogma. Finally it contains so much 
that is novel, and, because of its very novelty, questionable, 
that the reader is puzzled to make up his own mind as to 
its value. 

These statements may at any rate be ventured : 

(i) The suggestion that the proper mode of isolating 
economic forces for the purpose of clearer analysis is to dis- 
tinguish between those springing from existing conditions 
and those due to heredity seems a distinct advance over the 
distinctions between ' ' natural ' ' and ' ' actual, " " normal ' ' 
and " market," or even " static" and " dynamic," hereto- 
fore made use of in economics. It recognizes the part evo- 
lution plays in shaping industrial society as do none of the 
others. 

[254] 



Proi^kssor Pattern's Thkory of Prosperity 91 

(2) The refutation of the cost — in the sense of pain cost 
— theory of value and distribution is useful, and more useful 
still is insistance on the fact that one phase of economic 
progress is the substitution of pleasurable activity for pain- 
ful effort. 

(3) Clear recognition of the fact that production not only 
leads to consumption, but that consumption leads to produc- 
tion, is also a step forward. 

(4) The accuracy of the picture Professor Patten draws 
of the part the consumer plays in curbing monopoly and 
perpetuating interest may be questioned, but it is certain 
that his analysis confirms his contention that too exclusive 
attention is given to the production side of these and related 
questions. 

Finally, irrespective of the merits of particular theories, 
the general contention of the second part of the book that 
economics has to do not with economic men but with classes, 
each the inheritor of peculiar mental and moral traits, and 
that due regard must be given to these differences if con- 
temporary phenomena are to be understood, cannot be too 
strongly insisted upon. 

lyike all of Professor Patten's books, The Theory of Pros- 
perity will render its principal service by helping others to 
break away from traditional distinctions and accepted 
theories. It opens a wide field for thought and study and 
perhaps not its least merit is that it leaves the reader per- 
suaded that while the field is undoubtedly there, much the 
larger part of it is still open. 

Henry R. Seager. 

JVashington, D. C. 



KDITORIAI,. 



At a meeting of the Board of Directors of the Academy, held Jan- 
uary 25, 1902, Professor I^indsay tendered his resignation as president. 
He explained that acceptance of the position of Commissioner of Edu- 
cation of Porto Rico compelled his immediate departure for his new 
field of activity, and insisted that it would be detrimental to the best 
interests of the Academy to retain him in his responsible office when 
so far removed from the active work of the organization. With great 
reluctance the directors were forced to admit the wisdom of his deci- 
sion and the resignation was accepted. Professor Rowe, the first vice- 
president of the Academy, was unanimously elected president, and 
Professor Lindsay was persuaded to accept the position of first vice- 
president. 

In wishing Professor Lindsay the fullest measure of success and 
happiness in his new work, it is a pleasure to recall to members of the 
Academy his notable services to the society during the many years of 
his connection with it. He became interested in the organization 
while he was still a student at the University of Pennsylvania. How 
active that interest remained while he studied abroad in the years 
1892, '93 and '94 is attested by the list of his contributions to the 
Annals ^ during that period. Returning to Philadelphia in the sum- 
mer of 1894 to accept a position at his Alma Mater, he soon made 
himself the trusted leader of the group of young men who became 
connected with the Academy at about the same time. In January, 
1895, he originated the important department of Sociological Notes in 
the Annals and continued to edit it until January, 1901, when the 
pressure of other duties compelled him to entrust the task to Doctors 
Devine and Hagerty. 

When Professor James left Philadelphia in 1S96, to go to Chicago, 
Professor Lindsay became the chief assistant of Professor Falkner in 
the administrative work of the Academy. He showed such marked 
capacity in this department that it was decided two years later to 
separate the administrative from the publishing activities of the society, 
and Professor Lindsay assumed direction of the former as first vice- 
president. From that time until the present he has been, to an ever- 
increasing extent, the active head of the organization. On Professor 
Falkner's entry into the public service in 1900, Professor Lindsay was 
chosen associate editor of the AnnalS, and on Professor James's re- 
tirement from the presidency a few months later, he succeeded to the 

1 Cf. Personal Note, vol. v, p. 418, November, 1894. 

[256] 



Kditoriai< 93 

position whicli he had for two years filled so creditably in all but 
name. Since January, 1900, he has thus occupied a position similar 
to that held by the honored founder of the Academy during the first 
six years of its life. As Professor James is entitled to credit for the 
origination of the Academy idea and the successful direction of the 
organization during its formative years, so Professor Lindsay deserves 
the honor of having brought it to its fullest efficiency. The two years 
of his administration have been the most fruitful and prosperous that 
the Academy has yet enjoyed, and if it is now on a basis which makes 
even Professor Lindsay's retirement possible without a serious curtail- 
ment of its activities, it is largely to his talent for organization and 
untiring zeal that the result is due. 

The progress made under Professor Lindsay's guidance has been in 
several different directions. The monthly meetings in Philadelphia 
have been raised to the dignity of notable events in the social, and 
even more in the intellectual, life of the city. Annual meetings have 
been instituted and the papers on questions of the day presented on 
these occasions have come to be recognized as contributions to the 
literature of the social sciences which no serious student can afford to 
neglect. These meetings have brought to Philadelphia each winter a 
distinguished list of speakers, and that the efforts of the Academy in 
this direction are appreciated is shown by the increase in the local 
membership of the society to 493. Not only the city membership, 
but the general membership and the number of subscribers have 
increased. Most noteworthy is the increase in the number of life 
members from twelve to fifty-three, which has been the direct result 
of Professor Lindsay's personal attention. The increased member- 
ship affords larger income for useful work. But what has been done 
could not be accomplished by the expenditure of members' fees 
alone. From the first it has been the Academy's policy to defray the 
expenses of the annual meetings from special contributions. Profes- 
sor Lindsay has done valuable service not only in securing subscrip- 
tions to the annual meeting funds, but in interesting in the work of 
the Academy, leaders in business and in public life, whose attention 
might not otherwise have been called to the society. 

Professor Lindsay's success in directing the affairs of the Academy 
is prophetic of the larger success that awaits him in Porto Rico. Since 
the Academy must lose him it is pleasant to think that his abilities 
are to be devoted to the interests of the new wards of the nation, and 
on that most important side, education. We feel sure that we voice 
the thoughts of all members of the Academy in wishing him good 
speed in his new work. 

It is a happy coincidence that at the very time that Professor Lind- 

[257] 



94 Annates of the American Academy 

say has decided to enter the service of Porto Rico, Professor Rowe 
has completed his work as Chairman of the Commission to Revise the 
Laws of that island, and has returned to resume his duties at the 
University of Pennsylvania. Before leaving Philadelphia to enter 
the public service in the summer of 1900, Professor Rowe was as active 
as the president himself in organizing the meetings of the Academy. 
He has also been from the beginning the editor of the earliest and 
perhaps most important special department of the Annai,s, the 
Notes on Municipal Government. Thus as regards both the princi- 
pal activities of the Academy, Professor Rowe is admirably equipped 
for his new duties as president. His experience of public aflFairs and 
his tireless industry insure a successful administration, and the 
Academy is to be congratulated on being able to command his services 
for duties as onerous as they are honorable. 

Henry R. Seagsr. 



THE ACADEMY AND ITS WORK. 

The American Academy op Powticai, and Sociai< Science was for. 
in Philadelphia, December 4, 1889, for the purpose of promoting the politi 
and social sciences, and was incorporated February 14, 1891. 

While it does not exclude any portion of the field indicated in its title, ye 
its chief object is the development of those aspects of the political and social 
sciences which are either entirely omitted from the programs of other societies, 
or which do not at present receive the attention they deserve. Among such 
obiects may be mentioned : Sociology, Comparative Constitutional and Admin- 
istrative Law, Philosophy of the State, Municipal Government, and such por- 
tions of the field of Politics, including Finance and Banking, as are not ade- 
quately cultivated by existing organizations . 

In prosecuting the objects of its foundation, the Academy has held meetings 
and engaged extensively in publication. 

MEMBERSHIP. 

" Any person may become a member of the Academy upon the proposal by 
any member and the approval of the directors." — By-Laws, Article IV. 

Persons interested in the study of political, social and economic questions, 
or in the encouragement of scientific research along these lines, are eligible 
to membership and will be nominated upon application to the Membership 
Committee of the Council, American Academy, Station B, Philadelphia. 

Thore is no Initiation Fee. Annual Dues, $5. Life Membership Fee, $100. 

MEETINGS. 

Public meetings have been held from time to time at which the members of 
the Academy and others interested might listen to papers and addresses 
touching upon the political and social questions of the day. The meetings 
have been addressed by leading men in academic and practical life, a wide range 
of topics has been discussed, and the papers have generally been subsequently 
published by the Academy. 

The first scientific session of the Academy was held on March 14, 1890 ; 
three other sessions were held in 1890 ; seven in 1891 ; five in 1892 ; five in 
1893 ; six in 1894 ; four in 1895 ; six in 1896 ; eight in 1897 ; eight in 1898 ; 
seven in 1899, and eight in 1900, or sixty-eight in all. 

PUBLICATIONS. 
Since the foundation of the Academy, a series of Publications has been 
maintained, known as the Annai^S of the American Academy of Political and 
Social Science and the Supplements thereto. These publications have brought 
home to members accurate information and carefully considered discussions of 
all the questions embraced within the field of the Academy's interests. The 
Annai,s is sent to all members of the Academy. 

ANNAIvS. 

The Annai^ was first issued as a quarterly, but since the second volume 
it has appeared as a bi-monthly. At the present time, the Annai^S comprises 
two volumes of about 500 pages each per annum. The sixteen volumes thus 
far issued comprise sixty-one numbers, constituting with the supplements 
11,027 pages of printed matter which have been distributed to the members of 
the Academy. 

Besides the larger papers contributed by many eminent scholars both at 
home and abroad, especial attention has been directed to the departments. All 
important books are carefully reviewed or noticed by specialists. The depart- 
ment of Personal Notes keeps the reader informed of movements in the 
academic and scientific world. Notes upon Municipal Government and Soci- 
ology preserve a careful record of events and other matters of interest in these 
subjects, which at the present time claim so large a share of public attention. 



To persons not members of the Academy, the price of Vols. I.-V., 
including supplements, is |6.oo a volume, and of Vols. VI.-XVI., I3.00 each. 
Separate numbers |i.oo each. Special rates to Libraries : Vols. I.-V., I5.00 
each ; Vols. VI.-XVI., ^2.50 each. 

Members are entitled to discounts varying from x6% per cent to 20 per 
cent on orders for back numbers or duplicate copies of publications. All cur- 
rent publications are sent to members free of charge. 



LIBRARY OF CONGRESS 




013 779 345 3 



OFFICERS. 



Former President, 1890-igoo, 
EDMUND J. JAMES, Ph. D., University of Chicago 

Presideni, 
SAMUEL McCUNE LINDSAY, Ph. D., University of Pennsylvania. 



LEOS. ROWE, Ph.D., 
University of Pennsylvania. 



Vice-Presidents, 

FRANKLIN H. GIDDINGS, PH. 
Columbia University, 



WOODROW WILSON, Ph. D., 
Princeton University. 



Secretary, 
JAMES T. YOUNG, Ph. D., 
University of Pennsylvania. 

Treasurer, 

STUART WOOD, ESQ., 

400 Chestnut Street, Philadelphia. 



Counsel, 

CLINTON ROGERS WOODRUFF, 
North American Bldg., Philadelphl 

Librarian, 

PROF. JOHN L. STEWART, 

Lehigh University. 



EDITORS OF THE ANNALS. 

HENRY R. SEAGER, Editor. 



Associate Editors, 



EMORY R. JOHNSON. 



SAMUEL McCUJTE LINDSAY. 



BOARD OF DIRECTORS. 

ROLAND P, FALKNER, SAMUEL McCUNE LINDSAY, HENRY R. SEAGER, 

EDMUND J, JAMES, SIMON N. PATTEN^ STUART WOOD, 

EMORY R. JOHNSON LEO S. ROWE. CLINTON ROGERS WOODROFP 



GENERAL ADVISORY COMMITTEE. 



RT. HON. ARTHUR J. BALFOUR, M. P., 
London, England. 

PROF. C. F. BAST ABLE, 

Dublin University. 
PROF. F. W. BLACKMAR, 

University of Kansas. 
SIR JOHN BOURINOT, K.C.M.G., D.C.L., 

Ottawa, Canada. 
PROF. R. T. ELY, 

Wisconsin University. 
PROF. HENRY W. FARNAM, 

Yale University. 

PROF. W. W. FOLWELL, 

University of Minnesota. 

HON. LYMAN J. GAGE, 
Washington, D. C. 

DP KARL T. VON INAMA-STERNEGG, 
Vienna, Austria. 



PROF. JOHN K. INGRAM, LL.D. 

Trinity College, Dublin. 
PROF. J. W. JENKS, 

Cornell University. 
PROF. E. LEVASSEUR, 

Paris, France. 
PROF. AUGUST MEITZEN, 

University of Berlin. 
PROF. BERNARD MOSES, 

University of California. 
PROF. HENRY WADE ROGERS, 

Yale University. 
PROF. WILLIAM SMART, LL.D., 

University of Glasgow. 
HON. HANNIS TAYLOR, LL. D., 

Mobile, Ala. 
PROF. LESTER F. WARD, 
Washington, D. C. 



